NEWARK, N.J. - Statements made by defendants in a securities class action lawsuit against a pet food company and certain of its executive officers in 2015 investor earnings calls were not forward-looking or protected by the safe harbor provision of the Private Securities Litigation Reform Act (PSLRA), and the lead plaintiff has shown that the defendants knew that their statements were false when they made them, a federal judge in New Jersey ruled Jan. 12 in denying the defendants' motion to dismiss (Gary Curran v. Freshpet Inc., et al., No. 16-2263, D. N.J., 2017 U.S. Dist. LEXIS 5833).
NEW YORK - It is unclear whether a federal district court properly applied the correct standard in determining that defendants in a securities class action lawsuit failed to properly rebut the presumption of reliance by a preponderance of the evidence as required pursuant to the U.S. Supreme Court's ruling in Basic Inc. v. Levinson, a Second Circuit U.S. Court of Appeals panel ruled Jan. 12 in vacating and remanding the lower court's grant of class certification (Arkansas Teachers Retirement System, et al. v. Goldman Sachs Group Inc., et al., No. 16-0250, 2nd Cir., 2018 U.S. App. LEXIS 810).
NEW YORK - A data and metrics provider for the media, advertising and marketing industries will pay $110 million to settle claims that it and certain of its current and former officers and directors violated federal securities law by engaging in a massive accounting fraud, lead plaintiffs claim in a motion for preliminary approval of settlement and stipulation of settlement filed Jan. 12 in New York federal court (Fresno County Employees' Retirement Association, et al. v. comScore Inc., et al., No. 16-1820, S.D. N.Y.).
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 16 granted a joint emergency motion to defer consideration of a petition for a writ of certiorari in an appeal of a securities class action lawsuit that asks it to provide guidance to lower courts as to the evidence that is necessary under Supreme Court precedent to prove reliance (Petroleo Brasileiro S.A. v. Universities Superannuation Scheme Limited, et al., No. 17-664, U.S. Sup.).
NEW YORK - A lead plaintiff in a securities class action lawsuit against an energy company and certain of its current and former executive officers failed to plead any material misrepresentation or omissions or scienter to support his federal securities law claim that the defendants concealed that the company's former CEO neglected his responsibilities to the company while secretly exercising control over another company that did significant business with the energy company, a federal judge in New York ruled Jan. 10 in granting the defendants' motions to dismiss (Jeffrey Fries v. Northern Oil & Gas Inc., et al., No. 16-6543, S.D. N.Y., 2018 U.S. Dist. LEXIS 5307).
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 12 agreed to hear an appeal of a District of Columbia Circuit U.S. Court of Appeals ruling that Securities and Exchange Commission administrative law judges (ALJs) are constitutional officers pursuant to the appointments clause of the U.S. Constitution (Raymond J. Lucia, et al. v. Securities and Exchange Commission, No. 17-130, U.S. Sup.).
NEW HAVEN, Conn. - A reinsurance executive accused of engaging in a $2.5 million fraudulent scheme settled claims brought by the Securities and Exchange Commission on Jan. 11 after the SEC filed a complaint in Connecticut federal court (Securities and Exchange Commission v. David S. Haddad, et al., No. 18-00055, D. Conn.).
CINCINNATI - The Sixth Circuit U.S. Court of Appeals on Jan. 8 affirmed a lower federal court's dismissal of a putative class action alleging that the fiduciaries of a publically traded company's stock ownership plan breached their duties by failing to protect the plan from harm caused by the artificial inflation of the company's stock price due to fraud and misrepresentation (Todd Graham, et al v. v. Richard Fearon, et al., No. 17-3407, 6th Cir., 2018 U.S. App. LEXIS 407).
WASHINGTON, D.C. - For the second time in two months, the Securities and Exchange Commission on Jan. 5 issued an order of suspension of trading to a cryptocurrency trading company over concerns about the company's business operations and market activity (In The Matter Of UBI Blockchain Internet Ltd., File No. 500-1, SEC).
ST. LOUIS - A federal district court did not err in dismissing an investor's class action lawsuit against a securities brokerage for allegedly violating the terms of its "duty of best execution" because the investor's claims were preempted by the Securities Litigation Uniform Standards Act (SLUSA), an Eighth Circuit U.S. Court of Appeals panel ruled Jan. 5 in affirming (Nicholas Lewis v. Scottrade Inc., No. 16-3808, 8th Cir., 2018 U.S. App. LEXIS 493).
WASHINGTON, D.C. - The U.S. Department of Labor (DOL) on Jan. 5 announced that a final rule amending the claims procedure requirements for employee disability benefit plans governed by the Employee Retirement Income Security Act will go into effect on April 1.
NEW YORK - The Second Circuit U.S. Court of Appeals on Jan. 5 said it will not reconsider its Nov. 6 ruling that a federal judge did not err in granting a motion for class certification filed by shareholders in a securities class action lawsuit even though the judge erred in applying the U.S. Supreme Court's ruling in Affiliated Ute Citizens of Utah v. United States Affiliated Ute Citizens of Utah v. United States (Joseph Waggoner, et al. v. Barclays PLC, et al., No. 16-1912, 2nd Cir.).
WASHINGTON, D.C. - The U.S. Supreme Court on Jan. 8 granted a communications networks hardware and software supplier's motion to strike shareholders' supplemental brief challenging a California Superior Court ruling that the shareholders in a securities class action are not preempted by the Securities Litigation Uniform Standards Act (SLUSA) from bringing their Securities Act of 1933 claims (Cyan Inc. v. Beaver County Employees Retirement Fund, et al., No. 15-1439, U.S. Sup.).
NEW YORK - Brazilian oil company Petroleo Brasileiro S.A. (Petrobras) will pay $2.95 billion to settle claims that it concealed from investors its involvement in an illegal bribery and kickback scheme in violation of federal securities laws, according to a press release issued by the company on Jan. 3 (In re Petrobras Securities Litigation, No. 14-9662, S.D. N.Y.).
SAN FRANCISCO - The Ninth Circuit U.S. Court of Appeals on Dec. 29 affirmed a district court's dismissal of claims for violation of California's unfair competition law (UCL) and other claims asserted against a financial services firm in relation to trades it made to a securities company, finding that all the causes of action were barred by the Securities Litigation Uniform Standards Act (SLUSA) (Francis X. Fleming Jr. v. The Charles Schwab Corporation, et al., Nos. 16-15179, 16-15189, 9th Cir., 2017 U.S. App. LEXIS 26982).
SANTA ANA, Calif. - Defendants in a pair of related securities class action lawsuits alleging an insider-trading and front-running scheme regarding pharmaceutical company Valeant Pharmaceuticals International Inc.'s attempt at a hostile takeover of Allergan Inc. will pay $290 million to settle the claims against them, according to a press release issued by Valeant on Dec. 29 (Anthony Basile, et al. v. Valeant Pharmaceuticals International Inc., et al., No. 14-2004, C.D. Calif., and Timber Hill LLC v. Pershing Square Capital Management, No. 17-4776, C.D. Calif.).
PHOENIX - Two men have agreed to pay nearly $370,000 to settle claims that they engaged in insider trading scheme in violation of federal securities laws, according to a stipulation of settlement filed in Arizona federal court on Dec. 14 (Securities and Exchange Commission v. Lanny Brown, et al., No. 17-4630, D. Ariz.).
FLINT, Mich. - Automobile manufacturer Fiat Chrysler Automobiles N.V. (FCA) and certain of its executive officers have failed to show that lead plaintiffs in a securities class action lawsuit have not properly pleaded materiality or scienter in claiming that the defendants misrepresented the company's American retail sales in violation of federal securities laws, a federal judge in Michigan ruled Dec. 14 in denying the defendants' motion to dismiss (Carl Palazzolo, et al. v. Fiat Chrysler Automobiles N.V., et al., No. 16-12803, E.D. Mich., 2017 U.S. Dist. LEXIS 205572).
CINCINNATI - A federal district court erred in dismissing a shareholder class action against the operator of the country's largest for-profit hospital system and certain of its executive officers for failure to plead loss causation because lead plaintiffs have shown that the filing of a complaint against the company alleging Medicare fraud and the defendants' own disclosures that the company's stock was down were sufficient corrective disclosures, a Sixth Circuit U.S. Court of Appeals panel ruled Dec. 13 in reversing and remanding (Norfolk County Retirement System v. Community Health Systems Inc., et al., No. 16-6059, 6th Cir., 2017 U.S. App. LEXIS 25136).
SAN FRANCISCO - An investor group is the most appropriate candidate for lead plaintiff because it has the largest financial stake in the litigation and meets all other statutory requirements to serve in the role, a federal judge in California ruled Dec. 8 in appointing the investor group as lead plaintiff (Inchen Huang v. Depomed Inc., et al., No. 17-4830, N.D. Calif., 2017 U.S. Dist. LEXIS 202580).
WASHINGTON, D.C. - The U.S. Supreme Court on Dec. 8 announced that it will determine whether the Ninth Circuit U.S. Court of Appeals properly ruled that American Pipe & Construction Co. v. Utah tolls the statute of limitations to permit a previously absent class member to bring a subsequent class action outside the applicable limitations period (China Agritech Inc. v. Michael Resh, et al., No. 17-432, U.S. Sup.).
CHICAGO - Dismissal of a securities class action lawsuit against a for-profit college and certain of its current and former senior executives is warranted because the lead plaintiff in the action failed to plead falsity or scienter in making its federal securities law claims against the defendants, a federal judge in Illinois ruled Dec. 6 in granting the defendants' motion (Pension Trust Fund for Operating Engineers v. DeVry Education Group Inc., et al., No. 16-5198, N.D. Ill., 2017 U.S. Dist. LEXIS 200272).
HOUSTON - Defendants in a securities class action lawsuit against a worldwide provider of professional services and technologies within the government services and hydrocarbons industries on Dec. 4 asked a federal judge in Texas to dismiss federal securities law claims because shareholders failed to plead a material misrepresentation, scienter of loss causation (In re KBR Inc. Securities Litigation, No. 17-1375, S.D. Texas).
NEW YORK - A federal district court erred in dismissing a securities class action lawsuit against a China-based online and mobile commerce company and certain of its senior officers because shareholders had properly pleaded that the defendants acted with the requisite scienter by concealing that the company was subject to administrative proceedings by China's State Administration for Industry and Commerce (SAIC) in the months leading up to its initial public offering (IPO), a Second Circuit U.S. Court of Appeals panel ruled Dec. 5 in reversing and remanding (Christine Asia Co. Ltd., et al. v. Jack Yun Ma, et al., No. 16-2519, 2nd Cir.).